The Lord Jim Trust - Why the Forbes List is WRONG

In December 2010, an attorney associated with Jim Simons, the billionaire founder of the hedge fund Renaissance Technologies, submitted a secret application to Bermuda's highest court.
He was seeking approval for a set of changes to a Trust Fund Simons had quietly maintained on the island since 1974.
Getting approval for the changes - which included adding his charitable foundation as a beneficiary of the Trust's fortune - required Simons to give the court, under seal, data relating to his overall wealth.
Simons' legal team insisted that such filings must be limited.
The "exact quantum" of Simon's wealth was a strictly private matter, trust lawyer John Robert Balfour Richmond argued.
"A Google search against Mr Simons' name will throw up any number of estimations of his or his family's wealth," Richmond wrote in a secret affidavit filed with the 2010 request.
"Wikipedia, citing Forbes, for example, states his wealth as being $8.5 billion."
However, Richmond knew what Forbes apparently did not.
In addition to his billions of dollars in U.S. assets, Simons had amassed $7.25 billion in a low-profile Bermudan Trust that is one of the largest private trust funds ever discovered.
A confidential accounting document, attached to the 2010 filing, projects the offshore fortune growing to $35 billion by 2030.
In general, trusts allow people to hand over technical ownership of assets to trustees, often a trust company, to use in accordance with the client's wishes.
Offshore trusts can be used to add an additional layer of complexity to this chain of ownership.
An offshore trust based in Bermuda can, for instance, own assets in Taiwan on behalf of a beneficiary in California.
Some foreign trusts, like Simons, hold the assets of a U.S. citizen but are regarded as foreign taxpayers, meaning that they conform to different rules of taxation and disclosure without breaking any U.S. laws.
Further complicating the blurry ownership of trusts is the lack of transparency with which they often operate.
Such secrecy has obviously been increased by tax havens.
Bermuda is one of numerous jurisdictions that do not require trusts to declare their existence by registering with local government authorities.
According to the leaked data, Offshore trusts accounted for the third-largest single area of Appleby’s business.
By 2014, the leaked files contained information about more than 2,600 offshore trusts linked to individuals and companies from more than 100 countries.
According to the analysis, roughly two thirds of these trusts are based in the Cayman Islands and Bermuda.
Leaked documents from Appleby's Bermuda office show that, between 2012 and 2015, the firm provided legal services to at least five secretive trust structures that each contained a billion dollars or more.
In each case, the Appleby file lists the clients as "CONFIDENTIAL".
One of these anonymous clients held three related trusts - two in Bermuda, one in the Bahamas - that together contained $8 billion in 2015, according to a memo describing the matter.
One feature of Simons’ trust was its delaying the payment, perhaps forever, of billions in tax dollars it would owe to the IRS if it ever paid out its fortune to the Simons family.
Unlike domestic trusts that must pay income taxes annually, foreign trusts like the Lord Jim Trust often pay much of their taxes only when funds are withdrawn - and those tax bills can be huge if the trust sits untouched for decades.
The billions in assets Simons held outside Bermuda gave him a key advantage: He didn’t need to withdraw funds for his personal use, so, for the most part, he wouldn’t.
Although the interest charges would apply to the money the trust had accumulated in previous years, all timely distributions of the trust's earnings within any current tax year would be taxed without any interest charge, so long as the funds were withdrawn in time, according to trust experts and the Lord Jim Trust documents.
The quiet residence of Simons’ billions in Bermuda begs the question: how many more massive holdings remain undiscovered offshore, perhaps waiting to someday distribute their billions?
Cool Interview conducted by Numberphile
James Simons (full length interview) - Numberphile
https://www.youtube.com/watch?v=QNznD9hMEh0
SOURCE:
https://www.icij.org/investigations/paradise-papers/secret-world-offshore-mega-trusts/
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